Cleft lip and palate is a major health problem because of the functional defect produced. Furthermore, surgical reconstruction results in lip and palate scarring, which inhibits facial growth and oral function. We have identified a unique population of stem cells present during fetal scarless repair. The cells were originally isolated from the fetal mouse dermis, but are blood-derived, and are called Dot cells. Our central hypothesis is that Dot cells are a group of blood-derived stem cells, with a high proliferation rate, and multi-lineage differentiation potential during tissue repair, and are the key cells responsible for scarless fetal skin repair. Dot cell function will be investigated to better understand the mechanisms of regenerative fetal wound repair. Our central hypothesis is based on the following observations: 1. Dot cells are present in the blood of fetal and adult mice and humans. The percentage of Dot cells in fetal blood is about twenty-times higher than in blood of four-week old mice. 2. Transplantation of fetal Dot cells reduces scarring in adult wounds, indicating these cells do have scarless repair function. 3. Transplantation via hematogenous injection of GFP-labeled cultured Dot cells to wounded adult mice demonstrates that Dot cells migrate to wounds and remain present in wounds during repair. 4. The differentiation of Dot cells is fusion-dependent. 5. Dot cells are a unique cell population, which has been identified for the first time by their unique size, locations, and cell surface markers. To test our central hypothesis, we have outlined a three-pronged approach: In Aim 1, we will determine Dot cells' surface markers, stem cell markers, and regulators of proliferation and differentiation. In Aim 2, we will examine the mechanism of scarless wound healing induced by Dot cells. In Aim 3, we will determine Dot cell differentiation patterns and their lineage capabilities. This proposal will contribute to our long-term goal of developing innovative treatment for scarless skin healing. Because we can successfully expand Dot cell numbers in vitro, we are optimistic that we can develop Dot cell-based therapeutic strategies to induce regeneration in skin and other tissues in the future. We are uniquely qualified to complete this proposal due to our experience identifying and investigating Dot cells a novel cell type. In addition, we have long history of fetal scarless and scarring wound healing research, and have successfully used the cellular and molecular techniques described herein. Project Narrative Cleft lip and palate is a major health problem because of the functional defects produced in speaking, swallowing, and dental formation. Furthermore, surgical reconstruction results in lip and palate scarring, which inhibits facial growth and oral function. We have identified a unique population of stem cells that induce regenerative and scarless skin healing in postnatal wounds. This proposal seeks to further understand their biology and mechanism of skin regeneration in order to develop new treatments for all patients with scarring and fibrotic disease.